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Is peak construction over? Seattle development declines at fastest rate in more than a decade

Mike Rosenberg, The Seattle Times on

Published in Home and Consumer News

About 5,700 new apartments opened just in the past year across the greater downtown region, and an additional 3,600 are set to be completed this year.

Rents downtown have begun dropping for the first time since last decade amid the construction boom, as some of the new luxury apartments opening in the city's hottest neighborhoods have sat empty. Altogether, the area has added more than 20,000 new housing units in the past decade.

There are up to 30,000 apartments still left in the pipeline, though developers recently have reported a pullback in new apartment plans now that rents are no longer keeping up with rising construction costs.

The second-most common type of development -- new office buildings -- is also on the decline.

After peaking with about 5 million square feet of office underway at the end of 2015 and 2016, office construction fell to 3.6?million square feet at the end of 2017. The downtown association has about 10 million square feet identified in the pipeline for the next three years.

Amazon continues to drive the office market -- and through its employees, the apartment market -- as it looks to add several million square feet through the next few years. It recently has begun expanding beyond South Lake Union and the Denny Triangle and into the downtown core. But huge projects for Google and Facebook are also underway, and some developers are building offices without tenants already lined up.

Hotel-room openings, which fell off a cliff during the recession, are set to boom this year because of the planned opening of the 1,260-room Hyatt Regency at Eighth and Howell. It will be the biggest hotel in the Pacific Northwest when it opens this fall.

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The downtown association's report covers South Lake Union, Lower Queen Anne, Capitol Hill, First Hill, the downtown core, the central waterfront, Denny Triangle, Belltown, Pioneer Square, the Chinatown/International District and Sodo.

The hottest neighborhood for development continues to be South Lake Union -- the area has 15 active projects right now. The downtown core and First Hill also have an outsized number of projects.

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